UK – Half of the roles in some First Milk head office and support teams are to be cut as part of ‘significant cost reductions’ across the business.
At a meeting today, First Milk said that removing up to 70 jobs was key in delivering a business ‘turnaround’.
Mike Gallacher, First Milk CEO, said: “None of the decisions announced today have been taken lightly, but they are necessary steps in the process of rebuilding a secure and stable future for First Milk, its members and its employees. As a team, our aim will be to provide every support for those impacted in the coming months.”
A new approach to milk pricing is also being taken that links local milk prices to value generated within four manufacturing and three milk balancing pools.
In a statement, First Milk said: “Farms located around our Arran, Campbeltown, Lake District and Haverfordwest creameries will make up our manufacturing pools
“Farms located on the Scottish mainland, within Northern England, and the Midlands of England/ East Wales will make up our balancing milk pools.”
Prices for June for ‘B price’ milk are projected at between 14-17 pence per litre.
"The collapse of dairy markets and the significant increase in milk volumes during 2014/15 exposed weaknesses in First Milk’s existing milk pricing system," the cooperative added.
"From 1st June 2015, pricing will be based on net commercial returns from First Milk’s manufacturing sites and customers."
A third element of the announcement is for a ‘refocus’ on core UK dairy contracts and customers, supported by the First Milk teams.
The statement added: “To ensure that the business is financially robust through the restructuring process, the First Milk Board has agreed a £3.3m reduction in member payments and this has been built into our milk prices, equating to an average price reduction of 0.33ppl.”
The cooperative said the turnaround is focused on 'providing great service and value to its customers'.
The measures follow a turbulent period for First Milk and are the result of a strategic review which follows the announcement two weeks ago of three senior executives to the management team.
TheCattleSite News Desk